HONDA The Power of Dreams

"We have traveled a long road, a road filled with many obstacles, to finally see the completion of Twin Ring Motegi. The saying goes, 'When you drink water from a well, remember the efforts of those who dug the well.' We could not have accomplished the project had it not been for the people of Motegi-machi and the passion of those at Honda who worked on the project. We must remember that."

In the mid-1980s, when Honda had finally emerged from a period of heated competition with rival Yamaha, the Motorcycle Sales Division at Honda's head office was examining a forward-looking project tentatively known as "Motor Gelände," from the German term for "ski slope." The sales staff's idea was to collaborate with dealers across Japan in creating a nationwide network of facilities where motorcycle users could enjoy riding their bikes, just the way skiers would out on the slopes.

The sales staff were in those days becoming skeptical about Honda's approach. Their concern was whether the company should continue developing new products one after the other and pushing them into the market. After examining various ideas, they decided that what Honda needed was a program that would expand the user base for motorcycles. The new project was their answer to the question, and they were confident that it would succeed.

The sales staff was also responsible for the idea of building independent motorcycle facilities throughout the country. Moreover, they planned to construct one mega-facility; a center of international scale where visitors could also indulge themselves in the enjoyment of cars and power products, in addition to motorcycles. This, they believed, was Honda's responsibility as the source of such products.

This project was approved by the Association of Honda Dealers as a strategy to be implemented on behalf of the national dealership network, and in February 1986, the MT (Motor Track) Project was launched as an interdepartmental undertaking. A team was assembled immediately, drawing on the personnel resources of the Motorcycle Sales Division and Motor Recreation Promotional Headquarters. The team members went on a tour of dealers throughout Japan, describing the project in order to ensure their understanding and cooperation. Thereafter, the dealers arranged suitable sites and began a variety of programs designed to promote motorsports. Soon those sites began holding driving classes, including beginners' classes that featured the use of 50cc motorcycles.

The core facility plan, however, which was to manifest Honda's effort as a socially responsible manufacturer, was making no progress. Masatoshi Suzuki, the managing director and general manager of Motorcycle Japanese Operations, had already proposed such an idea at the Special Management Meeting on Tangible Matters, one of the three special management meetings involving managing directors and board directors. Yet, he had indeed found that approval was not so easy to obtain. Although the executives were in general agreement concerning the concept, they were concerned with the profitability forecasts, which were difficult to obtain despite the sizeable investment needed for the facility. Suzuki, however, was not about to walk away. Along with Yozo Yoshida of Motor Recreation Promotional Headquarters, the MT Project's secretary-general, he attended numerous Special Management meetings, always with significant refinements designed to resolve problems the executives had previously pointed out. The two men shared a passion for the project, and were determined to make it a reality.

Top management, including Company President Tadashi Kume, had decision-making power, but was reluctant to give Suzuki and Yoshida an unequivocal "no." Still, they had become increasingly pessimistic about the commercialization of society at large. They were afraid that people would soon lose their "love" for motorcycles and cars, and instead begin to think of them as mere tools. The management felt Honda needed something new - something that would nurture aspirations - in order to create a progressive car culture and raise the level of morale among company employees.

The times were changing dramatically, though. Following the crash of the stock market in February 1990, the Japanese economy went into a rapid downward spiral, which was all the more devastating after such a long period of growth. Actual growth in the GNP had slipped into the negative territory and personal consumption had slumped as well, resulting in a decline in domestic auto sales. Like many other companies hit hard by the recession, Honda had found itself at a critical juncture.

Under the circumstances, it was natural that the MT Project would be under such pressure. After all, the budget for the project was equivalent to the entire net profit of one fiscal term at the time. Moreover, critical perceptions had emerged at management meetings, where the progress of the project was reported. The board members raised tough questions such as "Why don't we squeeze the budget," and "Can we postpone the plan?"

Zen'ichi Mabuchi, then the project's acting LPL, would sometimes lose his appetite for words during such heated exchanges. However, despite the criticism, Senior Managing Director Nobuhiko Kawamoto remained a staunch ally, speaking out in the project's defense. This was because Kawamoto himself held the opinion that Honda should not be only a manufacturer of products but also a company that could provide an outlet for people and their aspirations.

Kume retired in June 1990, and Kawamoto became the new company president. Therefore, with the change in management the company began searching for ways to revitalize the organization. Based on an idea raised at the board meeting, it was decided that Motegi would be used to inspire the employees. They would begin with a company-wide contest in order to seek out the most creative ideas for Motegi. In August, a large poster was put up on the bulletin board at all factories and offices, reading, "Wanted: Adventurers of the Heart. If interested, contact the MT Development Planning Office. We promote the establishment of Mobility World Motegi." The purpose of this poster, obviously, was to recruit project members within the company. The said project members could then take on specific tasks for the project, employing a budget of several tens of billions of yen. The idea contest and recruitment poster had thus made "Motegi" a familiar word among Honda employees.

Two hundred and twenty employees replied to the ad. All were brimming with enthusiasm at the opportunity to help bring Honda's dream to life. After sifting through essays on themes such as self-introduction and reasons for applying and a long series of interviews, seven male and three female applicants were finally appointed to the project membership. With that the newly expanded team of 25 persons, each with experience in different functions, began reviewing the mountains of ideas submitted by the employees, trying to find the most interesting and original plans. Various possibilities were considered under the theme of "mobility on land, on the sea, and in the sky."

February 1991 saw the establishment of Honda Mobility World Co., Ltd., with capital of 100 million yen as a joint venture with Suzuka Circuit Land. As a result, five associates of Suzuka Circuit Land, each an expert in a specific field, joined the project team.

The established schedule had stated that construction would begin at Motegi in July 1991, in time for an opening in April 1994. However, it was beginning to look as if the schedule would be delayed more than two years, since the layout had to be changed in areas where the landowners remained in opposition to the sale. Thus, Honda was required to conduct another round of environmental impact studies regarding birds, insects, and plants, in accordance with the regulatory requirements of Tochigi Prefecture. The new studies had to be completed by early June 1992. This meant there would be a significant delay in the issuance of permits for development.

At that point, speculative articles were published in newspapers and other media, featuring such headlines as "Honda to Join Others in Canceling Project?" After all, the country had just seen its bubble economy collapse after 53 months of continuous growth dating to December 1986. As a result, the thirty or so construction projects for racing facilities across Japan were falling by the wayside one after another. Soon, the residents of Motegi-machi were very concerned about the future of their project.

One evening Mabuchi was called by the town's deputy mayor. "Please tell me the truth," said the gentleman, pressing Mabuchi for an answer. Mabuchi, however, replied without hesitation, "We have no intention of canceling the project. Please be assured and give us your support, just as before." Separately, Maruyama and his staff had been attempting to calm the landowners by saying, "Should the project be canceled, it is because Honda has gone under."

Another problem had also reared its head. When a public hearing was held concerning the environmental impact study, several residents who had moved from cities voiced their objections. Claiming the project would have a damaging effect on the environment, they began an organized protest. Many Motegi residents were stunned. Trees need nurturing to grow, they said. They need people to remove the weedy undergrowth and prune away dead branches. However, Motegi-machi was no longer able to provide that care. To the landowners and other residents, the narrow-minded protest that ignored the town's bleak realities was completely off base. However, the protest caught the attention of the media, in light of growing public sentiment regarding the environment. Therefore, Mabuchi got busy with the reporters and journalists. It seemed there was nothing moving ahead on schedule.

The MT Project team was also concerned about the future of their endeavor. They had formed four groups in order to study project themes and plans regarding "Motor Gelände," "Do Sports," "Natural Recreation" and software development. However, it was frustrating to examine ideas for a project when one was unsure whether the project would really survive. Agonizing days continued while they waited for an answer. Although the team had not been told of a cancellation, they could certainly perceive the difficulties in the situation. The department's budget was slashed in half, and many other Honda events such as idea contests and NH Circle World Meetings were canceled. Expecting the worst, the team devised a contingency plan that called for considerably shorter courses, no bleachers for an audience, and an unpaved parking area lying on bare ground. Still, in their hearts, they were shouting, "We don't want to give up. We will not surrender!"

As the budget of 38 billion yen gradually became a reality, numerous plans were integrated under the MT Project, all based on two themes: motorsports and safe driving. Using the keyword "people," the team set out on a quest for ideas that would propel the new facility into the 21st century. As a first step, they decided to study examples from the U.S., where motorsports were thriving as a modern entertainment industry.

Hajime Takakuwa flew to the U.S. in May 1993. Takakuwa, who had been assigned to the project from Suzuka Circuit Land, was designing race courses at Motegi. When he went to see a NASCAR Race in Charlotte, in the southeastern state of North Carolina, he was amazed. Though the day's program was only part of a two-week event, the circuit was filled with at least 100,000 people. He could hear them cheering and shouting, and to an extent he wondered why.

"What a huge crowd," he wondered. "But why? What's different about this event?"

Takakuwa studied the circuit carefully, until something significant became apparent. It was the design of the stands, which allowed the spectators to follow the entire race with their own eyes. Takakuwa knew that with road-racing courses people in the audience could see the machines blast by for only a brief moment as they zoomed along the stretch of pavement in front of the seats. By contrast, at the oval course where the NASCAR race was held, the spectators could watch every move their favorite drivers made, from green light to checkered flag, and all from the convenience of stands overlooking the course.

Takakuwa subsequently visited Indy races, midget-class races and various other events in the U.S. Each time he was amazed to find that the races had been produced as a form of audience-participation event. Through interviews with dozens of circuit staff and officials, he learned that, an ideal oval course should be 2.4 kilometers long, in order to let the audience feel the excitement of high-speed racing, which of course was the key appeal of oval-course competition. Above all, Takakuwa realized that the spirit and concept of motorsports in the U.S.-notably the ways such races were produced and enjoyed-was something very different from what existed in Japan.

"No matter what, I want to introduce the American trend in motorsports to Japan," Takakuwa thought. Therefore, immediately upon his return to Japan he drew up report after report detailing his findings with regard to the American racing world. Then, in October of that year, Osamu Kobayashi, who had at one time headed the Public Relations Department and Motor Recreation Promotional Office, was named acting LPL on behalf of the project.

"You must make sure the facility sends a message from Honda. This will be our gift to the 21st Century," Kawamoto told Kobayashi. Kobayashi was inspired by those words, and was proud he had been given the responsibility of such a project. Indeed, he thought, MT was the very essence of Honda's corporate culture.

Kobayashi began an exhaustive review of the plan along with Takakuwa and other staff members. They did not want to build a facility that would simply be thought of as Japan's ninth road course. Instead, they envisioned a facility equipped with an oval course and a wide range of amenities for the participation of motorsports enthusiasts and leisure spectators alike.

Several months later, the authorities of Tochigi Prefecture were ready to issue a development permit based on the revised layout submitted a year earlier, which reflected the partial changes necessitated by the missing parcels of land. Even though time was not on their side, the team did not want to compromise the project's guiding concept. This was their last chance. The issues were discussed every day from every possible perspective, and a process of trial and error was initiated in order that a means of achieving their goal could be identified. At the same time, Kobayashi met with each of the company directors comprising the management team, taking them out to the construction site in Motegi and discussing the dream he knew Honda should pursue.

Based on the results of numerous studies carried out under the MT banner, numerous management meetings were held to decide whether or not to build an oval course. Nobuyuki Otsuka, senior managing director and chairman of the Special Finance Committee, whose task was to review and establish profit/fund strategies for the Honda group, made several trips to Motegi. There he examined the concept and future prospects as outlined by the team. Through that process, he came to realize that the company must be prepared to spend 60 billion yen in order to complete the project as planned.

Net profits for the fiscal 1992 term amounted to 30 billion yen. The forecast for 1993 was less than inspiring, at just half that figure. There was no way such an enormous budget could be approved. On the contrary, the company was under pressure to implement a corporate restructuring in order to ensure the flexibility and strength needed to overcome difficult times ahead. Otsuka, however, continued in search of ideas that would keep the project alive. He was well aware of the previous president Kume's desire to realize the project, as well as the current president Kawamoto and the many others behind the project. All of them wanted to create a symbol of Honda's corporate culture. Otsuka had no wish to extinguish the flames of such a great collaborative effort.

Otsuka at last concluded that the 40 billion yen needed to keep the project running for a while didn't have to be paid out as a lump sum. Even if the project was ultimately to require as much as 60 billion yen, the facility could be expanded gradually over the course of a decade or more. With that in mind, they had only be expending around 5 billion yen each year. Therefore, Otsuka decided that although the company was in deep financial trouble, Honda would be able to come up with the money using funds on hand.

A management meeting was held February 1, 1994, to finalize any issues that had so far gone undecided, such as the building of an oval course and associated site work, which had already been scheduled. Kawamoto and Otsuka, sitting side by side at the meeting, murmured to each other continually. A concerned Kawamoto kept asking, "Can you do this?" to which Otsuka would consistently reply, "Yes, we'll be able to accommodate it." The meeting eventually concluded with approval of the plan, which called for a race course facility offering both road-circuit and oval tracks. Coincidentally, 1994 was also the year that had been established for Honda's entry into the competitive Indy Race Car circuit, and this was to work very much in favor of the MT Project. Approval, however, was granted on the condition that the tracks and visitor accommodations be built at a final cost of less than 43 billion yen, and that the entire facility open by the end of 1997. Since Tochigi Prefecture had on January 27 issued a development permit based on the original plan, preparation of the site was able to begin as early as mid-February.

The name of the operating company was subsequently changed to Twin Ring Motegi Co., Ltd., and the project name became "Motegi Project." Lengthy discussions were held in which project members examined how they could meet the conditions of approval given at the management meeting. Thus, it was already July when the final course layout was decided and the request for changes regarding the oval course was submitted to the offices of Tochigi Prefecture. However, the last-minute change was met with anger among the regulators, who were furious that Honda would have made such a drastic change in plans within just a few months of the development permit's issuance.

The team was not about to give up, though. Convinced that the dual-course design was what was needed to make Twin Ring Motegi a racing facility for the 21st Century, Kobayashi and his colleagues visited the prefectural offices repeatedly. To show their utmost respect, they bowed to every official they met in the hallway. Motegi-machi's Mayor Abe even lent as much support as he could. Ultimately the officials came to understand the need for such changes, seeing that the prefecture as a whole would benefit from the presence of a world-class venue rather than Japan's ninth road course. Thus, when at last the regulators filed their request for processing, the streets of Motegi filled with Christmas jingles.

Kawamoto announced the specific plan of Twin Ring Motegi in January 1995 at the company president's New Year's press conference.

Another core purpose of Twin Ring Motegi was its safe-driving facility. Again, just as they had done on behalf of the racing section, the team went through a series of discussions in an attempt to integrate original ideas with Honda's expertise in safe driving, which the company had accrued through three decades of effort in the field.

Twin Ring Motegi's construction, which required that hills be leveled and lowlands be brought up to grade, was to be the largest construction project in Japan ever financed by a single, private company. The magnitude of work involved in improving 640 hectares of land (137 times greater than the Tokyo Dome indoor baseball stadium - which required moving 1.3 million cubic meters of earth by volume and redistributing it to raise the level by as much as 65 meters - was equivalent to the construction of the New Hiroshima Airport. Motegi-machi, whose population was a meager 18,000, suddenly found itself playing host to 800 construction personnel, 280 trucks, and seven 70-ton dump trucks with giant tires 2.7 meters in diameter. During the construction, many strict rules were in force on behalf of environmental protection. For example, any vehicle leaving the construction site had to have its tires washed with water so that they would not soil the nearby roads. Furthermore, in addition to preserving 60 percent of the trees present at the site, the water systems, mountain ridge lines, and other natural features were left unaltered. This was done in order to retain the natural landscape of the surrounding area. The nanophya pygmaea, a rare subspecies of dragonfly that propagated in marshlands that prior to Honda's acquisition had been used for agriculture, were transplanted and preserved with the help of local scientists. This, in fact, was the world's first successful transplantation of the nanophya pygmaea.

Chairman Andrew Craig of CART, the organizing body in charge of the Indy Car Race series, visited Twin Ring Motegi in March 1996, while it was still under construction. "Are you crazy?" Craig said, clearly awestruck by the scope of construction. "It looks as if you're building a dam." However, he followed that remark with an expression of high hopes for the project. "We want to bring our race to Japan," he said, "just as we've done in Brazil and Australia. And we'll see it happen right here." Craig could not have been more correct, for in November of that year an agreement was signed to hold Japan's first Indy Car Race event in the spring of 1998 at Twin Ring Motegi.